This intangible asset can be the secret to growth, productivity, customer loyalty and employee happiness, but it’s not easy to build and even harder to measure – trust me
Trust is not easy to quantify. It can be built, won, lost or betrayed. Its dictionary definitions encompass belief, reliability, responsibility and expectation. For many businesses and their leaders, it is crucial to success. But without a way to understand and track trust levels, organisations could waste time, money and effort trying to become more trustworthy – and failing.
Why trust matters in business
One of the few organisations that has established a system for measuring trust is the consultancy Edelman. Its annual Trust Barometer surveys thousands of respondents from around the world to gauge how much people trust institutions.
Trust is, the company says, the “ultimate currency” and underpins any organisation’s ability to operate, to take responsible risks and to bounce back from mistakes.
Biljana Cvetanovski, partner at management consultant McKinsey, agrees. “Trust matters,” she says. “It’s absolutely critical for how a business performs.”
Yet it remains difficult to describe what we mean by ‘trust’ and therefore to pin it to growth. That means research typically alludes to a relationship between the two, rather than being able to directly correlate them.
For example, PwC has tried to link trust and financial growth. Its 2022 Consumer Intelligence Series survey found that 91% of consumers say that if a company does something to gain their trust, they are likely or very likely to buy from them.
There are also demonstrable benefits in terms of retaining customers. According to PwC’s findings, when companies took action to gain trust, 88% of customers would recommend them to others, 91% would think highly of them, 83% would defend them to others and 60% would even be more likely to share information about them on social media.
And the flipside is true too. Dr Andrew White, director of advanced management and leadership at Oxford’s Saïd Business School says organisations must remember that their position in the marketplace is down to how much the public trusts them.
“Increasingly we are recognising that companies, particularly large companies, take up a space in society and we put a lot of responsibility on their shoulders,” he says.
From energy providers to airlines, how much ‘space’ these companies are accorded will correlate to how much customers trust them. Lose that trust, and they will simply go elsewhere, as PwC’s data demonstrates. If a company does something to lose customers’ trust, the figures show that 71% are unlikely to buy from it again.
How can companies build trust?
Ryanair, once synonymous with terrible customer service, has emerged as one of the most trusted post-Covid airlines. This is largely down to it embracing what Cvetanovski sees as the first step in trust-building: “actually delivering on your promises” and “doing what you said you would do”.
In Ryanair’s case this was both a promise to customers – to get them where they were going, on time – and to workers. While easyJet and British Airways laid off swathes of their workforce in the early days of the pandemic, Ryanair kept its staff on, albeit in exchange for pay cuts. It also kept its pilots flying, even when that was only on simulators.
When the skies reopened, Ryanair was able to react to the increase in demand much faster because it wasn’t held back by workforce and recruitment issues. In June 2022, easyJet cancelled 741 flights from UK airports. British Airways cancelled 421. Ryanair cancelled just 25.
Increasingly we are recognising that companies take up a space in society and we put a lot of responsibility on their shoulders
As the Ryanair example shows, if a company does what it says it will do (in this case, flying customers from A to B) then trust grows. But people need to see evidence that business is working to improve their experience and the digital world makes it increasingly easy for the public to hold organisations to account.
“We’re in a world where people are becoming cynical about talk,” says White. “Social media puts a spotlight on action. So companies have to do concrete things. They’ve got to fix stuff.”
The role leaders play in building trust
And leaders must consider not only what they are doing to build trust, but also how they are doing it. Dr John Blakey, global CEO coach and founder of The Trusted Executive, is a trust expert. His book, The Trusted Executive: Nine leadership habits that inspire results, relationships and reputation, is a practical guide to building trust in organisations, born out of interviews with CEOs and more than 500 board-level leaders. Through his research, he has noticed a significant shift in what the modern workforce expects from those at the top.
“People like me were trained not to show weakness as a leader. You were trained to project an image of being all-knowing, all-powerful,” he says. “But in a modern world of trust, people want to work for human beings. When your leader is in the right place at the right time, shows a bit of vulnerability, admits to having bad days and sleepless nights, it connects them at a human level with the people around them. And that builds trust.”
White agrees. Leaders who pair openness to feedback with a willingness to act upon it stand in much better stead to earn the trust of their staff than those who do not, he says.
“As a leader, there is an asymmetry of power – people are naturally gathered around you.” The best and most trustworthy leaders, he says, understand this and actively work to create a culture which is open. “They recognise the status quo isn’t perfect. They embrace questions, lean into difficult emotions and are happy to be around people who are frustrated or angry.”
How to build trust within the workforce
Trust is also not a one-way thing, explains ex-Googler Jessica Nordlander, who is now the COO of enterprise discussion management platform ThoughtExchange. The platform gives leaders access to the unbiased views of their workforce, enabling them to build trust by incorporating the perspectives of their staff into their decision-making.
“Trust happens between things,” she explains, pointing to the examples of leaders who brought in employee-monitoring software when the pandemic hit, terrified they couldn’t trust their workers to be productive at home. “These leaders are looking for easy solutions, but it’s not easy to build real trust between humans. It’s way easier to gravitate to surveillance and create an illusion of control.”
But leaders who can resist this urge will see the benefit. Research by American neuroeconomist Dr Paul Zak, published in the Harvard Business Review, found that employees at high-trust companies report 74% less stress, 106% more energy at work, 13% fewer sick days and 50% higher productivity.
How to track and measure trust over time
It is often said that what is measured is treasured, but for organisations that wish to become more trustworthy, both internally and externally, this is easier said than done.
McKinsey’s Cvetanovski believes that “measuring trust numerically is possible”, at least when it comes to customer or employee satisfaction levels. If it can be assumed that higher levels of satisfaction denote higher levels of trust, then sentiment analysis systems already exist to chart how a company is performing over time. This is done by asking customers and workers a series of questions about how happy or satisfied they are with a business, and their answers are given number ranges denoting levels of satisfaction.
And herein lies the rub. If companies wish to track a qualitative value like trust, they must find ways of making it quantitative.
Blakey’s Nine Habits model does this by translating the concept of trust into behaviours which leaders and workers can demonstrate. His method suggests trust is built by demonstrating ability, integrity and benevolence. Beneath each of these three pillars are three habits. (Below ‘ability’ for example, the habits are ‘deliver’, ‘coach’ and ‘be consistent’.)
This system, much like traditional sentiment analysis, begins with a survey. Organisations are asked whether they see leaders practising each of the nine habits, the results act as a benchmark, and specific strong and weak points are highlighted, offering areas for improvement.
“That’s the process,” says Blakey. “You take a big, important word, create a model, make sure the model is credible and then use it to generate some sort of scoring system. What it does is essentially give people the language to talk about trust.”
But ultimately, all ways of measuring trust begin with the same first step: “Just ask people,” says Nordlander. “People are pretty clear when there’s trust and when there’s not. People know. It’s an emotional reaction.”
Edelman’s Trust Barometer, now entering its 22nd year, follows this same principle of asking people. This year’s report highlights a particular opportunity for business, now the only trusted institution. Where media and the government are seen as divisive, business is increasingly seen as a unifying force. Savvy organisations would do well to capitalise on this by asking themselves, their employees, and their customers to what extent they are trusted. And, more importantly, listen carefully to the answers.
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This intangible asset can be the secret to growth, productivity, customer loyalty and employee happiness, but it’s not easy to build and even harder to measure – trust me
Trust is not easy to quantify. It can be built, won, lost or betrayed. Its dictionary definitions encompass belief, reliability, responsibility and expectation. For many businesses and their leaders, it is crucial to success. But without a way to understand and track trust levels, organisations could waste time, money and effort trying to become more trustworthy – and failing.
